Using volume analysis to trade like a banker
Why do currency prices move? Quite simply it is a function of supply and demand. When a currency is moving upward, it is because there is increased demand, and to purchase the currency one must bid a higher price as there is only a limited supply of said currency. And vice versa for when forex prices move downward for a currency. So, it’s demand and supply volume that is required to move the market
The forex markets as you may know are massive, with trillions of dollars moving around it each day. So most volume can’t affect it much, certainly not the small indpendent traders out there. It;s the banks and institutional money that moves the markets, as that’s where the real big mony is.
The bankers and hedge funds have all the advantages we don’t. They have information, technology and the huge sums of money to win at their trades that we don’t, we can’t beat them, so what can we do? We join them!
Knowing how institutional money operates, we are able to track those traders and trade along with them, So this is one of our major trading strategies at iEconomists.com and what a lot of our forex analysis articles are based on. We are a bunch of ex economists bankers who analyze where the volume is creating supply and demand in the forex markets. And being ex economists and bankers we know what the bankers and hedge fund traders are thinking and we setup to follow.
So by trading on volume and following the institutional money, we can follow along with the sharks, rather than becoming their next meal. We hope you enjoy our articles and trade profitably with them.